NORFOLK – As the campaign season continues, Democratic St. Lawrence County Legislator Jason Clark says the low fund balance the county has been criticized for is not the fault of his party.

Clark, who represents District 12, says the questionable state of the county’s finances is due to Republican policies while they were in the majority. The closure of General Motors plant and Alcoa East foundry in Massena and 98 farms throughout the county is also to blame, he says.

And he says it is the Democrats, since they regained control of the board, who have set the county on the path to recovery with a five-year plan.

He asserts that the national financial crisis that broke in 2007 and 2008 should have been anticipated in 2005 and 2006 by the well-educated Republicans on the Board of Legislators.

“During 2005 and 2006 while the nation’s economy was setting up to implode, the St. Lawrence County Legislature was Republican controlled,” Clark wrote in a letter to the editor. “Seated on that board: a well-published economist and a well-published sociologist, both of whom had Ph.D.’s; members with Masters degrees; a pair of real estate experts; a management consultant; an Ivy League graduate and several local business leaders. The nation’s looming financial meltdown should not have been a surprise to many of the members of that Board.”

Clarks says tax cuts and spending down of the fund balance during Republican-majority years in the legislature are to blame for the difficult state of the county’s finances, which has been criticized for two years in a row by the state comptroller’s “stress” report of municipalities that do not have string financial standing.

“The events of 2006 are noteworthy. It was an election year. As the Republican led board crafted the 2007 budget, they were likely concerned about their electability,” Clark writes. “Voters received a proposed 7% tax cut just before the election but they went on to lose control of the Board by a 10-5 margin. As they had in 2005, while the national economy was collapsing, they spent down the fund balance by another $7 Million.”

Since then, the Democrats have regained control of the county board, and have taken steps to bring back confidence in the county’s financial performance.

“Last year, the Democratic led Board developed, for the first time ever, a five-year spending plan. We also returned about $1.4 Million to the fund, an increase of 18% in just one year. Since 2009, we have reduced county staffing by about 140 positions. Moody’s upgraded the county’s bond rating. Impressive. Yet, almost every Republican on the Board tried to again spend down the fund balance during last year’s budget deliberation. Unbelievable,” he wrote.

Clark lays down a challenge:

“How then can any rational person, Republican or Democrat, blame the Democrats on the current Board for anything other than enabling our emerging rebound?”

Clark’s complete letter follows.

To the Editor:

There’s an old saying that goes, “Slap it on a sign, say that it’s so and eventually people will believe it to be true.” Had the Republican candidates for the County Legislature made an actual sign in advance of this year’s election, it might have read, “Fund Balance Good. Fund Balance Gone. Blame the Democrats.” Yet, fund balance issues date back to 2005 and 2006 when Republicans controlled our Legislature.

In order to explain the connection though, we need to recall what happened nationally between 2005-2008. Our national banking system suffered an almost apocalyptic meltdown causing the “Great Recession.” Causes include the burst of the housing bubble and the subsequent collapse of the sub-prime mortgage market.

While the public at large wasn’t aware of the pending crisis, economists, bankers, and real estate experts were. As early as 2005, Federal Reserve Chairman Alan Greenspan warned of the eminent collapse of the bubble. The call for concern was national by the middle of 2006 and by the end of the year, national newspapers were attempting to explain the looming crisis.

In February 2007, HSBC, one of the world’s largest banks wrote down its holdings of sub-prime related mortgage securities by $10.5 Billion. By April 2007, more than 50 mortgage companies had filed for bankruptcy. By year’s end there were at least 100. Bear Stearns nearly imploded in July 2007. In 2008, it was sold in an emergency fire sale, as was Merrill Lynch. Lehman Brothers went bankrupt and Morgan Stanley and Goldman Sachs converted from investment banks to commercial banks. And so the story goes…

So where is the connection? During 2005 and 2006 while the nation’s economy was setting up to implode, the St. Lawrence County Legislature was Republican controlled. Seated on that board: a well-published economist and a well-published sociologist, both of whom had Ph.D.’s; members with Masters degrees; a pair of real estate experts; a management consultant; an Ivy League graduate and several local business leaders. The nation’s looming financial meltdown should not have been a surprise to many of the members of that Board.

Between 2005-2007, the county received several one-time federal and state financial reimbursements. According to documents from that period, the County Treasurer, a Republican, Mr. Bob McNeil (a man that I have a lot of respect for), warned that those funds would dry up. In 2005, the county’s fund balance was $21.3 Million. In 2006, it was 22.2 Million. Fund Balance Good!

The events of 2006 are noteworthy. It was an election year. As the Republican led board crafted the 2007 budget, they were likely concerned about their electability. Voters received a proposed 7% tax cut just before the election but they went on to lose control of the Board by a 10-5 margin. As they had in 2005, while the national economy was collapsing, they spent down the fund balance by another $7 Million.

In 2007, the budget team spent down the fund balance by another $7 Million. But this time, the reimbursements had ceased, just as Mr. McNeil said they would. In three years, in the middle of our largest financial crisis since the Great Depression, three Boards spent down more than $21 Million in fund balance. At the end of 2008, the county’s fund balance was $14.3 Million.

The precedent that was established in 2005 by Republicans, and lasted for three years, created the challenge that Republican candidates for office chide about now. Spending down $21 Million of fund balance in three years is, largely, the reason that the County needs to borrow for cash flow now. A $40 Million tax levy with a $35 Million fund balance wasn’t reasonable but neither was burning down $21 Million given what was happening nationally.

Since 2007 the fund balance has volleyed with a low of about $6.5 Million in 2012 to its present level of about $8 Million. Some conclude that the Democrats are somehow to blame because they have controlled the Board. Fund Balance Gone!

Not so fast. Last year, the Democratic led Board developed, for the first time ever, a five-year spending plan. We also returned about $1.4 Million to the fund, an increase of 18% in just one year. Since 2009, we have reduced county staffing by about 140 positions. Moody’s upgraded the county’s bond rating. Impressive. Yet, almost every Republican on the Board tried to again spend down the fund balance during last year’s budget deliberation. Unbelievable.

Consider again the points made in paragraph 4. Think about how national trends paralleled our local experience…General Motors in 2007…Alcoa East (Part 1) in 2009…98 farms in St. Lawrence County closed in 2009 alone…record unemployment between 2007 and 2013…Alcoa East (Part 2) in 2014…

How then can any rational person, Republican or Democrat, blame the Democrats on the current Board for anything other than enabling our emerging rebound? Think about where we have been. Think about where we are now…as a county and as a country. County finances have turned a welcomed corner. The journey continues but the Democratic members of the St. Lawrence County Legislature have brought us a very long way.

Jason Clark, Legislator

St. Lawrence County District 12

Norfolk